The National Treasury has now shelved its earlier announced plan to offer switch bonds worth Sh204 billion to holders of securities maturing in April and May this year, indicating increased confidence in rolling over the amounts when they fall due without straining its ability to fund the budget.
A bond swap or switch occurs when the proceeds from the sale of one debt instrument are used to subsequently purchase another debt instrument. A switch bond issuance involves the direct conversion of maturing Treasury bills and bonds into longer-term securities, cushioning the exchequer from a liquidity crisis.
